Analysis: Did Licensing Changes Spur VMware Vs. Microsoft?

Last week Microsoft released Windows Server 2012 to manufacturing and announced its worldwide availability starting on Sept. 4, with a totally revamped and simplified licensing model.

Funny, isn't it, that just a week later comes the news that VMware, Redmond's archrival in the virtualization space, will do away with its complicated vRAM entitlements licensing scheme. The move last July drew the ire of VMware customers.

Microsoft last year obviously saw an opening in what had until then been seemingly impenetrable armor on VMware's market-share stranglehold, even after the company doubled the entitlements in vSphere Enterprise to 64 GB and in Enterprise Plus to 96 GB. The new licensing model, introduced last fall with vSphere 5, replaced the original core-based model with one based on the amount of memory allocated to virtual machines.

For its part, Microsoft in June released System Center 2012, the latest version of its server management and administration tools with licensing options reduced from more than a hundred to just two. At the high end is System Center 2012 Datacenter edition, which lists for around $2,600 for a four-socket version with no limit on OSEs, which is Redmond-speak for physical or virtual instances of an operating system environment. "You can scale to as many images as you want and costs will not increase," said Brad Anderson, corporate vice president of Microsoft's Management and Security Division at a January analyst briefing. "That's very different from VMware." System Center 2012 Standard lists for around $1,300 for a two-socket license that supports two OSEs.

Microsoft also will offer just four versions of Windows Server 2012. At the high end, the Datacenter edition supports an unlimited number of VMs for around $4,800 list. "Organizations want to increase their use of virtualization and not be penalized," said Anderson at the briefing earlier this year. "They want scalability of their systems without increasing their costs."

At VMworld in San Francisco next week, VMware will unveil vSphere 5.1 with enhancements to performance, security and management, and it is expected also to reveal its plan to return to CPU-based pricing.